Federation Advocates for CDFI Certification Funding
NCUA Responds with Technical Assistance Awards for 2014
FOR IMMEDIATE RELEASE
New York, NY – (December 3, 2013) – The National Federation of Community Development Credit Unions’ campaign to significantly increase the number of low-income credit unions certified as Community Development Financial Institutions (CDFIs) is gaining momentum and support throughout the credit union industry. The Federation has been working with national and state credit union leaders to increase the number of credit unions with CDFI certification.
The Federation applauds the decision by the National Credit Union Administration to make available technical assistance awards to fund credit unions seeking CDFI Certification. Grants of up to $2,500 per credit union are available. “Credit unions historically make up the second largest category of Community Development Financial Institutions,” NCUA Board Chairman Debbie Matz said, “and NCUA works with the CDFI Fund, the Federation and others to help promote such awareness of this valuable tool for helping members of limited means. The agency will soon be announcing the details of our technical assistance grants for credit unions seeking CDFI certification, and we encourage eligible credit unions to learn more about these programs and how to become certified.”
Moreover, several credit union leagues have responded to the Federation’s appeal by offering to educate, inform and support their members seeking the certification. Most notably, the Mississippi Credit Union Association (MCUA) has committed to kick-off a year-long initiative with the Federation to help their credit union members understand what CDFI certification can bring to their communities. MCUA President and CEO, Charles Elliott, says “In Mississippi we have 84 credit unions and 75% qualify for low-income designation. They represent 86% of all members, 89% of total assets and one of the highest percentages of people living in poverty. We support the Federation’s mission of helping people achieve financial independence through credit unions and will be working with the Federation on increasing the number of CDFI certified credit unions in our state.”
Because credit unions comprise less than 25% of all CDFIs, the Federation, the CDFI Intermediary for the credit union industry, has been advocating in recent months for an increase in the number of CDFI certified credit unions. Cathie Mahon, President and CEO of the Federation points out, “CDFI certification is one of the building blocks for sustainable growth in low- and moderate-income communities. The CDFI Fund is one of the most important sources of capital Community Development Credit Unions can access to scale the delivery of safe, affordable financial products and services in their communities.”
Certification is provided by the the US Treasury Department’s CDFI Fund, which has awarded $1.5 billion in capital grants since it’s inception in 1994. To be eligible, credit unions must have a primary mission of promoting community development and must direct a minimum of 60% of their financing activities to an eligible target market, including an investment area or low-income population.
Most of the nation’s 2,000 low-income credit unions in the US are eligible for CDFI certification, though only 10% are currently certified. Credit unions represent the second largest category of CDFI, and the number of credit unions is growing at a rate higher than any other category. “In addition to providing access to external funding opportunities, CDFI certification gives credit unions additional credibility with consumers, partners and investors. Certification has become a fundamental tool in the work of community development credit unions. The Federation is doing its utmost to help credit unions interested in applying for the NCUA’s funding round,” says Mahon.
The Federation’s consulting arm, CU Breakthrough, has a mission to increase the number of credit unions that are certified and thereby eligible for future CDFI technical and financial assistance grants. Credit unions interested in exploring engagements can contact us at CUBreakthrough@cdcu.coop.
Media contact: Clarissa Ritter, firstname.lastname@example.org
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